• The U.S. dollar and euro were largely unchanged on Tuesday after the 10-year Treasury yield broke above the psychologically significant barrier of 3 percent.
The dollar index hit a three-month high of 91.076 against a basket of six currencies, though the big gains on rising U.S. government bond yields mostly occurred on Monday.
The dollar’s gains on Tuesday drove the euro down slightly past the two-month low hit Monday, on growing concerns that firmer U.S. Treasury yields would reduce incremental demand for the region’s bonds and stocks at a time when hedge funds have amassed record long bets in the single currency.
Some lingering worries that European Central Bank policymakers may signal a more cautious stance at a policy meeting on Thursday also pulled the single currency lower.
The single currency EUR= stabilised at around $1.22 on Tuesday after having plumbed to a low of $1.218 in the Asian session, its lowest since March 1.
The dollar set a 2-and-a-1/2 month high of 109.19 yen JPY= before cooling slightly to 108.7 yen.
The rise in U.S. bond yields has dented emerging market currencies and bond markets, including those in Asia.
• U.S. consumer confidence rebounded in April and new home sales increased more than expected in March, pointing to underlying strength in the economy despite signs that growth slowed in the first quarter.
The Conference Board said its consumer confidence index increased to a reading of 128.7 this month from a downwardly revised 127.0 in March. The index was previously reported at 127.7 in March. Confidence raced to more than a 17-year high of 130.0 in February.
In a separate report, the Commerce Department said new home sales increased 4.0 percent to a seasonally adjusted annual rate of 694,000 units last month as sales in the West surged to their highest level in more than 11 months.
• U.S. President Donald Trump on Tuesday said he wants to withdraw American troops from Syria “relatively soon” but not before their mission is completed, adding that negotiations over the crisis there should be part of a larger deal regarding Iran.
• President Donald Trump and French President Emmanuel Macron pledged on Tuesday to seek stronger measures to contain Iran, as the U.S. leader considers whether to ditch an international accord meant to prevent Tehran from obtaining a nuclear weapon.
At a joint news conference after lengthy talks, Trump did not repeat threats to withdraw from the 2015 agreement with Iran which was negotiated by his predecessor, former President Barack Obama, but made clear he has little patience for staying in the deal.
Trump made his comments during a news conference with French President Emmanuel Macron, who is trying to dissuade his American counterpart from pulling out of the accord. The push appeared to bear fruit on Tuesday as the leaders suggested a deal could be announced ahead of a crucial deadline in just under three weeks.
• U.S. President Donald Trump said on Tuesday a new North American Free Trade Agreement could be agreed on quickly, as Canada hailed progress on forging new rules for the auto industry, the pivotal issue in talks to revamp the 24-year-old accord.
Mexican Economy Minister Ildefonso Guajardo said on Tuesday that agreeing a new North American Free Trade Agreement (NAFTA) deal will depend on the flexibility of negotiations as he prepared to meet his U.S. and Canadian counterparts in Washington.
• The German government has lowered its economic growth forecast for this year, a source familiar with the decision said on Tuesday, reflecting expectations that an upswing in Europe’s largest economy was losing some momentum.
The government, which will unveil the new growth forecast on Wednesday, expects an expansion of 2.3 percent this year, down from a previous estimate of 2.4percent. This would still be the highest growth rate since 2011.
• Oil prices slipped on Tuesday as concerns the United States might reinstate sanctions against Iran faded somewhat, reducing worries about the future of Iranian exports.
Brent LCOc1 slid 85 cents, or 1.1 percent, to settle at $73.86 a barrel. Earlier in the session it hit $75.47, its highest since November 2014. West Texas Intermediate (WTI) crude CLc1 fell 94 cents to $67.70.
Reference: Reuters, CNBC
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